Curve (CRV) Price Drops Below $0.40 – Will Founder’s $100M Debt Trigger More Losses? 

Curve (CRV) price dropped to a 3-year low of $0.39 on September 13, as markets reacted to unusual transactions from a wallet address associated with founder Michael Egorov. Reports suggest an inflow of 609,000 CRV into Binance could be connected to Egorov’s $100 million debt.

Curve (CRV) is the native token of the CurveDAO, an integral part of the DeFi ecosystem responsible for issuing the CrvUSD stablecoin. A controversial $50 million Curve Finance Exploit in July 2023 had raised concerns about the founder’s $117 million loans. Is the Curve ecosystem at risk of another black swan DeFi liquidation event?

Curve Finance (CRV) Price at Risk: Unusual Transactions Linked to Founder.

CRV price appears at risk as PeckShieldAlert, a blockchain malware and security investigation firm, revealed unusual on-chain transactions from wallet addresses linked to founder Michael Egorov.

$CRV has tanked below $0.4. Michs #OTC counterparty, address 0xb0b8, who received 2.5M $CRV ~43 days ago (supposedly locked for 6 months), has now transferred 609K $CRV to #Binance.

Peckshield

This marks the first time the CRV token price has dropped below $0.39 since October 2020. But curiously, reports suggest more losses could be on the horizon for CRV token holders.

In July 2023, Beincrypto reported that active loans of about 300 million CRV tokens are set to liquidate from the Aave ecosystem when the price drops to $0.371. According to prominent Ethereum contributor Ryan Adams, most of those 300 million tokens are linked directly to Egorov’s $100 million stablecoin debt owed across multiple DeFi lending protocols, including Aave.

Recent on-chain events show that CRV traders are already preparing for a potential liquidation event.

Strategic Traders Have Mounted Sell-Orders Around Egorov’s Liquidation Price

Following Egorov’s unusual transactions, CRV traders have responded by mounting sell orders. According to data from the order books for 17 recognized exchanges, including Binance, Kraken, and Coinbase, investors have placed most of their sell-orders ahead of the $0.371 liquidation price.

The chart below shows that of the 53.2 million CRV active sell orders. Investors want to sell 27.7 million ahead of the -10% boundary, where the price will hit $0.36. Also, this far outweighs the 23.5 million CRV purchase orders active around those prices.

Curve Finance (CRV) Price at Risk | Aggregate Order Books of Exchanges, Sept 13, 2023 | Source: IntoTheBlock

The On-chain Market Depth chart shows the price distribution of active Curve DAO token (CRV) orders currently placed across recognized crypto exchanges.

In clear terms, investors looking to sell ahead of the liquidation price have now exceeded those looking to buy and cover their positions by more than 4.2 million CRV tokens. Without significant clarification or prompt assurances about the founder’s stablecoin debts. The buying pressure could further weaken as CRV edges closer to the liquidation price.

However, CRV is unlikely to go to zero in the coming days. Some strategic investors have also placed orders of 24 million tokens below the Curve debt liquidation price. If they step in to scoop the dip, they could inadvertently trigger a rebound and keep the Curve Finance DeFi ecosystem alive.